The S&P 500 climbed 1 percent to 1,454.92 at 4 p.m. in New
York. The index advanced 1.8 percent over two days. The Dow
Jones Industrial Average added 127.55 points, or 1 percent, to
13,551.78 today. About 6.2 billion shares traded hands on U.S.
exchanges, 2.7 percent above the three-month average.

“Investors are cycling back into risk as earnings as well
as economic numbers in the U.S. are somewhat better than
expected,” Chad Morganlander, a Florham Park, New Jersey-based
fund manager at Stifel Nicolaus & Co., which oversees about $138
billion in client assets, said in a telephone interview.
“Economic growth will continue to be sluggish even with the
flickers of hope that we’ve seen this morning.”

The S&P 500 has rallied 16 percent this year and is about 7
percent below its all-time high of 1,565.15 reached in October
2007. More than 80 companies in the S&P 500 have scheduled their
results this week, according to data compiled by Bloomberg. Of
the 50 companies in the benchmark index that have reported since
Oct. 9, 37 posted earnings that exceeded analyst estimates, the
data showed.

Industrial Production

Output at factories, mines and utilities rose 0.4 percent
in September after a 1.4 percent decline in August that was the
biggest since March 2009, the Federal Reserve reported today in
Washington. The median estimate in a Bloomberg survey of 85
economists called for production to rise 0.2 percent.
Manufacturing, which makes up 75 percent of the total, climbed
0.2 percent.

American equities followed European stocks higher as two
German lawmakers said the country is open to Spain seeking a
precautionary credit line. Michael Meister and Norbert Barthle,
officials within Chancellor Angela Merkel’s Christian Democratic
bloc, indicated a rolling back of German resistance to a full
sovereign bailout for Spain.

‘Good News’

“We have more good news than bad and no reason to take the
market down in the short term,” James Gaul, a portfolio manager
at Boston Advisors LLC which oversees about $2.3 billion in
assets, said in a phone interview. “The comments by German
lawmakers that Germany may be open to a precautionary credit
line to Spain may take some risk off the table there.”

Nine out of 10 groups in the benchmark index rose, with
commodity producers and technology shares rallying at least 1.5
percent. The Morgan Stanley Cyclical Index jumped 1.8 percent,
the most since Sept. 6, as investors bought shares of companies
most tied to economic growth. Financial shares added 0.7 percent
as a group.

Citigroup advanced 1.6 percent to $37.25, with trading more
than 187 percent above the five-day average. Directors ousted
Pandit after concluding that he had mismanaged operations,
leading to setbacks with regulators and a loss of credibility
with investors, a person with knowledge of the discussions said.

Pandit said he decided yesterday to leave after turning the
company around. He will be replaced as CEO by Michael Corbat.
President and Chief Operating Officer John P. Havens also
resigned, the bank said in a statement.

Leadership Team

The departures remove a leadership team that navigated
Citigroup through 2008’s global credit crisis, when taxpayers
rescued the bank from collapse with a $45 billion bailout.
Citigroup soared 5.5 percent yesterday, the most since March,
after earnings topped estimates.

“We think this could be an intermediate term positive,”
Matt Burnell, bank analyst at Wells Fargo & Co., wrote in a note
today. He recommends investors buy Citigroup shares. “Corbat’s
elevation strikes us as a positive for Citi, as it brings an
experienced banker into the CEO’s role.”

Goldman Slips

Goldman Sachs Group Inc. slumped 1 percent to $123.22. The
fifth-biggest U.S. bank by assets reported profit that beat
analysts’ estimates on higher underwriting fees and a jump in
the value of the firm’s own investments. Revenue from trading
fixed-income, currency and commodities fell short of gains
posted by JPMorgan Chase & Co. and Citigroup.

PNC Financial Services Group Inc. fell 4 percent, the most
in the S&P 500, to $60.40. The seventh-largest U.S. bank by
deposits reported quarterly profit that missed analyst
estimates. Excluding the effects of securities transactions and
integration costs, profit was $1.63 a share. The average
estimate of 32 analysts surveyed by Bloomberg was $1.66.

Johnson & Johnson, the world’s biggest maker of health-care
products, climbed 1.4 percent to $69.55. Third-quarter earnings
beat analyst estimates on rising demand for medical tools
acquired with the Synthes purchase and new prescription
medicines. The drugmaker raised its 2012 earnings forecast to
$5.05 to $5.10 a share excluding certain items, after trimming
the forecast last quarter by 5 cents to $5 to $5.07 a share.

Apple Advances

Apple Inc. jumped 2.4 percent to $649.79. The world’s most
valuable company sent out invitations for what it’s calling a
“special event” on Oct. 23 in San Jose, California. Apple
plans to unveil a smaller version of its iPad tablet at the
event, a person with knowledge of the matter said earlier this
month.

IBM slid 3.3 percent to $203.99 at 5:18 p.m. New York time.
The biggest computer-services company reported third-quarter
revenue after the close of regular trading that fell short of
estimates as currency fluctuations and slow hardware sales
crimped results.

Intel soared 2.9 percent to $22.35 in regular trading.
After the market closed, the shares erased 2.4 percent as the
world’s largest semiconductor maker said sales in the current
period will be $13.1 billion to $14.1 billion. Analysts on
average had projected sales of $13.7 billion, according to data
compiled by Bloomberg.

Intel Forecast

The company’s forecast suggests year-end demand won’t match
the most pessimistic expectations. Still, it doesn’t mean
computer makers will soon return to the growth pace of the years
preceding the advent of tablets and smartphones. A shift away
from traditional computers has put the market on course for its
first decline in more than a decade.

Mattel Inc. rose 5 percent, the most since July, to $37.20.
The world’s largest toymaker reported third-quarter profit and
revenue that topped analysts’ estimates.

Murphy Oil rallied 8 percent to $63.74. The El Dorado,
Arkansas-based company plans to spin off its U.S. refined fuels
business, including a network of gasoline stations at Wal-Mart
Stores Inc. locations, after hedge fund Third Point LLC said the
company should shed assets.

Kroger Co., a supermarket operator, increased 4.3 percent
to $24.43. Jefferies Group Inc. upgraded the stock to buy from
hold.

Fossil Inc. gained 7.3 percent to $91.31 for the third-biggest advance in the S&P 500. The maker of jewelry and leather
goods was upgraded to buy at Citigroup, which cited the
company’s inexpensive valuation as well as the earnings impact
from new brands and products.

Coca-Cola Co. slumped 0.6 percent to $37.90. The world’s
largest soft-drink maker said third-quarter revenue advanced
less than 1 percent to $12.3 billion, trailing the $12.4 billion
average of analysts’ estimates compiled by Bloomberg.

Clearwire Corp. tumbled 17 percent to $2.23. People with
direct knowledge of the situation said Sprint Nextel Corp. has
no immediate plans to take over Clearwire. Sprint, which agreed
to sell a 70 percent stake to Softbank Corp. for $20.1 billion,
was unchanged at $5.69.